Exclusive Comments from Marc Chandler – Fri 5 Jul, 2019

With negative yields where can big money find returns?

Marc Chandler, Managing Partner at Bannockburn Global ForEx joins me to recap the major news from this week. We start with the jobs data and how this is shifting some of the expectations heading into the Fed meeting. Next are some comments on the new head of the ECB and the trend of negative yields around Europe. This all leads to a discussion on what mutual funds and large money managers are doing to find yield.

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Comments:
  1. On July 5, 2019 at 12:11 pm,
    cfs says:

    I do not understand why the cost of Palladium is approaching twice the cost of platinum.

    • On July 5, 2019 at 12:51 pm,
      OOTB Jerry says:

      Ditto……..

      • On July 5, 2019 at 12:52 pm,
        OOTB Jerry says:

        You said one time, it had better property value….? more useful application ?

  2. On July 5, 2019 at 12:23 pm,
    cfs says:

    open interest on N.Y. Merc. Exchange is twice as much for Pt as Pd.
    Pt melting point is higher than Pd.
    Pt is stronger than Pd.
    Industrial use and consumption for Pt and Pd are about equal.
    Historically productions for Pt and Pd have been about equal.

    So I assume someone must be dumping Pt or someone is restricting supply of Pd…….!!??!!

  3. On July 5, 2019 at 2:54 pm,
    cfs says:

    Manipulation showed great ability today in THIN trading….

    Gold was put down under $1400.
    Silver was put down under $15

    Why wouldn’t you knock Platinum down under $800 so I would buy some more?

  4. On July 5, 2019 at 5:04 pm,
    Nigel says:

    FYI https://moneyweek.com/507382/platinum-palladium-or-rhodium-which-is-the-metal-of-the-future/

    Platinum’s main use is in diesel vehicles, whereas palladium tends to be used in petrol engines. But rhodium is the most effective catalyst for nitrous oxide (N2O) emissions in petrol engines, as much as seven times more effective than palladium. There is no substitute for rhodium.

    Platinum can substitute for palladium in petrol engines, but this substitution only tends to kick in when the palladium price is double that of platinum. In other words, if palladium is $1,500 an ounce, and platinum $750, we’ll start to see substitution.

    • On July 5, 2019 at 5:34 pm,
      OOTB Jerry says:

      Thank you Nigel…..

      • On July 5, 2019 at 6:58 pm,
        OOTB Jerry says:

        Interesting article…….

        • On July 5, 2019 at 6:59 pm,
          OOTB Jerry says:

          I have talked about the need for platinum to gain a new narrative. Jewellery demand is not coming to the rescue. Where is the demand going to come from? What is the story? The answer to that may be fuel-cell vehicles.

          The use of fuel-cell vehicles is expected to take off, but not until the early to mid-2020s (though the story will get out sooner than that). But if fuel-cell vehicles take off, so will platinum demand – and the normal prices and ratios I have discussed in other Money Mornings, where platinum trades at a premium to gold and palladium, will return.

      • On July 6, 2019 at 12:58 am,
        Nigel says:

        My pleasure…I learnt a few things from that article

        • On July 6, 2019 at 11:25 am,
          OOTB Jerry says:

          Ditto…….some really great points….thanks again

  5. On July 5, 2019 at 6:10 pm,
    cfs says:

    Thanks, Nigel.

    That may explain things. Except historical ratios, perhaps.

    • On July 6, 2019 at 1:06 am,
      Nigel says:

      I guess so. I did read somewhere else that it cost quite a bit in retooling to replace a palladium catalyst with a platinum one in automotive production so that the auto companies tend to put off making the change even if ultimately it would be cheaper in the long run